Screwed by Navy Federal

Anonymous · ‎04-12-2010

So after hearing such wonderful things about Navy Federal on this board, we decided to give them a go. My Dad's retired civilian DoD, and I live with him. Went to the Navy Federal branch in Altamonte Springs, FL, opened a joint checking and savings account. Dad decided to apply for a credit card, line of credit and auto loan. Pre-qualified for a $35K auto loan at 9.69%. Not fabulous, but not awful. When the rep put in the hard application, everything went to manual review.

Line of credit approved for $500 a couple of days later. Credit card declined (still waiting on letter)--had asked for $5K, no counter offer. Loan committee kept asking for more and more info to be faxed...pay stubs, address verification, yada yada. Then they wanted to see additional income, so we added me as a co-applicant. I'm self employed, so it was another round of faxes...tax returns, bank statements, etc. So today, a full week later, we finally hear the results. Suddenly the $35K at 9.69% became $25K at 16.19%!!! And we're not getting a blank check, we have to make the deal and have the dealer fax in a buyer's order, then 24 hours later we can get the check. And the new deal's only good for 2 weeks, not the 60 days we were previously promised.

Meanwhile, our credit scores have taken a huge hit from the three separate inquiries that they pulled from all three credit bureaus on each of us!!!! We've been fighting like dogs to repair our credit, and now this. I'm furious.

Credit snapshot (before all the inquiries): Dad EQ 654 TU 634 (pulled from here). Me EQ 637 TU 630 (pulled from here). A couple of very old baddies on his report (two chargeoffs and one collection, all from 2004). My report has two chargeoffs and a collection from 2005/2006, and dozens of perfect accounts dating to 1996. Utilization is a bit high, but we both have long credit histories (his AAoA is 8.5 and mine is right at 8 years). Three years of absolutely perfect payments on both reports.

So...WTF??? Why did Navy Federal promise one thing, make us send in as much paperwork as most mortgages require, and then completely change the deal? It feels an awful lot like bait and switch... any ideas from the credit gurus here?

ngerasimatos · ‎04-13-2010

I have noticed an increasing trend that Credit unions are starting to tighten their belts and are not as good as they used to be. My CU, www.PMCU.com which is also very similar to Navy FCU has recently gotten so tight with credit lines that the CSRs are discouraging people from applying. I had to fight tooth and nail to get a credit card with them and my score with TU was 700+ with literally no DTI. They said that becuase I am a contractor, even though I am W2 and not 1099.

In any case, I agree with you 100%

Try not to become a man of success but rather to become a man of value
Albert Einstein 1879 - 1955

800+ Club

Anonymous · ‎04-17-2010

I think they reviewed your information and made a suitable loan based on your credit worthiness. I'm not quite getting where or how they screwed you?? You applied for 3 lines of credit, they pulled your report, reviewed your circumstances and made a decision. That's what banks do.

Anonymous · ‎04-17-2010

1) We were offered a rate of 9.69% based on the soft pull. We would not have applied for the loan/authorized the hard pull had we been offered 16.9%. I understand that the rate was not set in stone based on the soft, but the interest rate we were offered was almost TWICE the original offer.

2) They made three separate inquiries with EACH credit bureau on each of us. I understood from both the information I gathered here and what we were told by the rep with whom we applied that all 3 lines of credit could be reviewed based on a single hard pull. What was the need to pull each bureau three separate times?

3) From both the information here and the rep with whom we applied, they pull EQ exclusively. Why the three pulls on each of us from TU and EX?

4) I compared our scores/baddies/etc to those reported by others here, and ours were precisely in line with those of people who were offered rates around 9-10%.

5) According to edmunds.com and other sites, people with our scores/credit history generally qualify for rates of 9-10% through credit unions. Why the discrepancy?

6) According to the phone rep we discussed the situation with, Navy Federal has a "new policy" in place, which is strictly confidential, but has severely changed their lending criteria. The "new policy" has not yet made its way into the "pre-qualification" system...hence we were pre-qualified under the old system but given a final offer based on the new top-secret policy.

How is this NOT a bait and switch?

Anonymous · ‎04-17-2010

That's tough. Given your scores, you might be better off going through the dealer for financing. Then maybe a year later, once you've established some history with Navy Federal, you can refinance at a lower rate. I think you got shafted because you're a new member.

nathan · ‎04-17-2010

I love navy fed, but they do not always offer the best auto rates.

Jazzzy · ‎04-18-2010

@Anonymous wrote:
1) We were offered a rate of 9.69% based on the soft pull. We would not have applied for the loan/authorized the hard pull had we been offered 16.9%. I understand that the rate was not set in stone based on the soft, but the interest rate we were offered was almost TWICE the original offer. I don't blame you for being frustrated. We all know that any sort of preapproval we get can change when they look at everything, but that doesn't make it any less frustrating. Keep in mind that a soft pull doesn't tell them anything about income. It also doesn't give them all of your expenses (such as rent). Once those calculations come into play, a lot can change.

2) They made three separate inquiries with EACH credit bureau on each of us. I understood from both the information I gathered here and what we were told by the rep with whom we applied that all 3 lines of credit could be reviewed based on a single hard pull. What was the need to pull each bureau three separate times? The number of separate inquiries that were done on each separate report was excessive (my opinion only). I don't understand why the line of credit, credit card, and auto loan all required separate pulls. When I got my credit card from PenFed, they did one hard pull when I joined from one CRA and used it for the credit card as well. Then, they even used that same pull 90+ days later when I got a used car loan. Have you asked Navy Federal if they will remove 2 of the 3 inquiries on each bureau? That leaves one on each bureau for each of you, and that's still a lot, but is more fair.

3) From both the information here and the rep with whom we applied, they pull EQ exclusively. Why the three pulls on each of us from TU and EX? No one here can tell you that, but when I applied for Discover last year, they pulled from 2 different bureaus. I was declined. When I called for recon, they then pulled from the 3rd. I was then approved, but I ended up with 3 inquiries before I was done. If Navy Federal saw something they didn't like on the first pull, they likely kept going...just like Discover did for me. We authorize them to do that when we sign the app...but then we hope that one is enough.

4) I compared our scores/baddies/etc to those reported by others here, and ours were precisely in line with those of people who were offered rates around 9-10%. Frustrating, but the credit climate changes all the time.

5) According to edmunds.com and other sites, people with our scores/credit history generally qualify for rates of 9-10% through credit unions. Why the discrepancy? Today's credit climate. Things are just plain tougher than they used to be.

6) According to the phone rep we discussed the situation with, Navy Federal has a "new policy" in place, which is strictly confidential, but has severely changed their lending criteria. The "new policy" has not yet made its way into the "pre-qualification" system...hence we were pre-qualified under the old system but given a final offer based on the new top-secret policy. Yes, very frustrating.

How is this NOT a bait and switch? No credit grantor can guarantee that they will give you the hoped-for outcome based on a soft pull. As said above, that doesn't take income and some other factors into account. We can call it whatever we want, but it is our new reality.

Lyythine · ‎04-27-2010

I thought the highest rate Credit Unions could charge for auto loans was locked at 12%? Im not positive, but I thought I heard that somewhere on here. Just a question for my own learning

Anonymous · ‎05-07-2010

Multiple Inquiries on the same day are supposed to be generally only counted and scored as a single query. You did shop for several lines of credits so the number of queries is understandable.

You have to keep in mind that credit unions are non profit lending institutions-- they do not have the overhead to absorb huge losses like a big bank, so they are becoming stricter with their lending policies. This is a result of the down economy and the massive number of defaults/nonpayments occurring.

An inquiry falls off your record pretty fast, so I wouldn't worry too much about dinged a few points on them. You'll actually lose more points for the sake of having a brand new line of credit opened. I'm entertaining the idea of getting a new auto loan and am fully expectant of my scores to drop 25 points as a result.

Anonymous · ‎05-11-2010

@Anonymous wrote:
Multiple Inquiries on the same day are supposed to be generally only counted and scored as a single query. You did shop for several lines of credits so the number of queries is understandable.

You have to keep in mind that credit unions are non profit lending institutions-- they do not have the overhead to absorb huge losses like a big bank, so they are becoming stricter with their lending policies. This is a result of the down economy and the massive number of defaults/nonpayments occurring.

An inquiry falls off your record pretty fast, so I wouldn't worry too much about dinged a few points on them. You'll actually lose more points for the sake of having a brand new line of credit opened. I'm entertaining the idea of getting a new auto loan and am fully expectant of my scores to drop 25 points as a result.

Only auto and mortgage INQs are scored as one, but that in no way implies that a creditor's automated application process will count them as one INQ.

Pretty fast? As in 2 years. Not many would define fast as two years.